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LEG

Leggett & Platt NYSE:LEG Stock Report

Last Price

US$33.22

Market Cap

US$4.4b

7D

-2.5%

1Y

-27.0%

Updated

30 Sep, 2022

Data

Company Financials +
LEG fundamental analysis
Snowflake Score
Valuation4/6
Future Growth1/6
Past Performance2/6
Financial Health2/6
Dividends6/6

LEG Stock Overview

Leggett & Platt, Incorporated designs, manufactures, and markets engineered components and products worldwide.

Leggett & Platt Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Leggett & Platt
Historical stock prices
Current Share PriceUS$33.22
52 Week HighUS$48.37
52 Week LowUS$32.97
Beta1.32
1 Month Change-13.08%
3 Month Change-5.60%
1 Year Change-27.01%
3 Year Change-15.90%
5 Year Change-31.45%
Change since IPO789.57%

Recent News & Updates

Sep 30

Leggett & Platt: Limited Financial Benefits From ECS Acquisition

Summary In 2019, LEG acquired ECS to propel LEG to greater heights. The post-ECS results show that LEG achieved limited financial benefits from the acquisition. LEG growth was driven by high reinvestment rates that on average exceeded 100%. This is not sustainable and will affect its ability to pare down debt. I valued LEG based on the post-ECS performance, and assuming a sustainable reinvestment rate. On such a basis there is no margin of safety at the current price in my opinion. Investment Thesis In 2019 Leggett & Platt (LEG) acquired Elite Comfort Solutions (ECS) for USD 1.2 billion. This was a very substantial acquisition considering that LEG’s Total Assets in 2018 were USD 3.5 billion. Some of the rationales for the acquisition were: “… supports achievement of the company's long-term 6-9% revenue growth target… Enables strong cash flow generation…” LEG achieved limited financial benefits from the acquisition. The performance of LEG post-ECS had deteriorated compared to the pre-ECS period. A valuation of LEG based on the post-ECS results showed that there is no margin of safety at the current price. Deteriorating performance post-ECS If my Feb 2021 investment thesis for LEG, I postulated that the acquisition of ECS in 2019 would provide a different growth path for LEG. I assumed that LEG would expand into the polyfoam sector. I thus valued LEG as USD 50 per share on this basis. Looking at the results over the past 3 years, I would conclude that LEG did not pursue this path. That investment thesis no longer applies. It looked as if ECS serves more like an internal supplier to LEG's existing businesses rather than growing ECS external customers. LEG had presented the following as the rationales for the acquisition: (Source: LEG’s press release for the ECS acquisition) Establishes a Global Leader in Bedding Technology and Manufacturing. Adds R&D Capabilities and Proprietary Foam Technologies. Creates Synergies Through Growth of New Hybrid Products. Positions the Company to Grow Internationally. Supports Achievement of Revenue Growth Target. Enables Strong Cash Flow Generation Did LEG achieve the above-stated goals? The ideal way to answer the question is to compare the post-ECS results for each of the above rationales with the pre-ECS performances. However, some of the rationales are qualitative in nature. At the same time, LEG did not provide sufficient details for a numerical comparison for many of them. As such, I looked at several metrics based on growth and returns as per Table 1. Based on these, I would conclude that LEG achieved limited financial benefits from the acquisition. Table 1: Comparative Performance (Author) Notes to Table 1: a) The 2022 performance was based on the doubling the 1H 2022 results. b) For this metric, Reinvestment rate = Reinvestment / PAT. The post-ECS rate was from 2020 to 2022 i.e. it excluded the year with the ECS acquisition. c) The analysis was based on data from LEG Excel worksheet. Refer to the segment growth section. Of the 7 metrics in Table 1, only 2 – Revenue growth and International sales - can be considered as better performances post-ECS. Even then, while there was better Revenue growth post-ECS, this was below the 6-9 % target. The bigger concern was the reduction in the return as measured by EBIT / Total Assets. The post-ECS return was 2/3 that of the pre-ECS return. Note that Reinvestment rate is linked to growth via the fundamental equation of Growth = Return X Reinvestment rate. The challenge for LEG is that its Reinvestment rate of greater than 100% is not sustainable. Growth profile LEG's business model appears to be one where there is annual closure or sale of business units as well as new acquisitions. The revenue growth is the net effect of these acquisitions and business closures. From 2010 to 2021: 14 business units were discontinued or sold. There were 32 (including ECS) acquisitions. Except for ECS, all these were within the existing LEG businesses and/or products. At USD 1.2 billion, ECS was the biggest acquisition over the past decade. Excluding ECS, LEG only spent USD 0.67 billion over the past 11 years for the other 31 acquisitions. I would consider the acquisitions and disposal as part of the “normal” CAPEX. On such a basis, LEG incurred an average net CAPEX of USD 111 million per year from 2015 to 2021. Note that the net CAPEX is after accounting for the disposal of PPE and/or businesses and included the ECS acquisition. Segment growth In 2020, LEG restructured its business into 3 segments. This makes it difficult to compare the current segment performance with those before 2020. However, LEG provided Excel worksheets on segment financials under the new structure backdating it to 2015. Based on this, I charted the segment revenue trends as shown in Chart 1 assuming 2022 to be double the 1H 2022 performance. LEG total revenue grew at 4.3% CAGR from 2015 to 2022. Chart 1: Segment Revenue (Author) The Excel worksheet also provided the annual organic growth rates for the various segments. The organic growth post-ECS for 2 segments seemed to be lower than those pre-ECS. Refer to Table 2. The Bedding Products and Specialized Products segments together accounted for about 2/3 of the total revenue. As such I would consider that the post-ECS organic growth was lower than the pre-ECS one. Table 2: Segment Organic Growth (Author) Note to Table 2: a) F F & T Products = Furniture, Flooring, and Textile Products. Note that the lower organic growth post-ECS makes it more challenging for LEG to fulfil one of the ECS acquisition rationales i.e. to be a global leader in bedding technology and manufacturing. Growth prospects The 3 business sectors that LEG operates in are not exactly growth sectors. I would consider them as mature ones. The US bedding (mattresses and foundations) market grew at a CAGR of 5.6% from 1997 to 2017. The forward growth projections are below the long-term US GDP growth rate of 4%. The non-US market is projected to grow at a slightly higher rate than that of the US. I have a comprehensive write-up on this sector in my Tempur-Sealy post that you can refer to. According to Statista, revenue in the US furniture market amounted to USD 230 billion in 2022. The market is expected to grow annually by 4.5% (CAGR 2022-2026). On a global basis, most of the revenue is generated in the United States. According to Grand View Research, the global flooring market size was valued at USD 257 billion in 2021. It is expected to grow at a compound annual growth rate of 5.6% from 2022 to 2030. In the Specialized products segment, the Automotive group accounted for about ¾ of the segment revenue. Statista projected global auto sales to grow from USD 2,755 billion in 2020 to USD 3,800 billion in 2030. This is equal to a CAGR of 3.3%. Given the above, the 4.3% CAGR achieved by LEG from 2015 to 2022 appears to be within the various sectors’ growths. If nothing else, LEG did not perform like a growth company in the various mature sectors. Reinvestments You can see from Table 1 that the Reinvestment rates post-ECS and pre-ECS were about the same. I defined Reinvestment rate = Reinvestment / Net Income Where: Reinvestments = CAPEX + Net Acquisitions – Depreciation & Amortization + Changes in Working Capital. The concern here is not the comparative rates. Rather it is that the average rates for both periods exceeded 100%. Table 3 tabulates the annual Reinvestment rates for LEG from 2015 to 2022. You can see that for most of the years, it is greater than 100%. Table 3: Reinvestment rates (Author) Notes to Table 3: a) The extraordinarily high rate in 2019 was because of the acquisition of ECS. b) The 2022 rate was based on the 1H 2022 results. The 100% Reinvestment rate is not a sustainable rate as it meant that LEG was not able to generate sufficient net income to fund the growth. It had to increase its Debt. This is supported by the high Debt Equity levels as shown in Chart 2. Chart 2: Debt Equity Trends (Author) Can LEG achieve a sustainable Reinvestment Rate? To lower its Reinvestment rate, LEG needs to either: Improve its Profits for the same quantum of Reinvestments. The Reinvestment rate can be a metric to assess this. Have more effective Reinvestments. One way to assess this is to see whether there were lower Reinvestments for the same quantum of changes in Revenue or Total Assets. As can be seen from Table 3, there is no reducing trend in the Reinvestment rate. In other words, there was no improvement in profits for the same quantum of Reinvestment. Chart 3 shows the past 12 years of Reinvestments as ratios of the changes in Revenue and changes in Total Assets. There does not seem to be any trend. This suggests that LEG did not manage to improve the effectiveness of its Reinvestments. These are back-of-envelop analyses, but it does show that it would be challenging to reduce the Reinvestment rates. Chart 3: Effectiveness of Reinvestments (Author) Financial position I have concerns about LEG’s financial position. I have earlier shown that LEG has a high Debt Equity ratio post-ECS. The more worrisome point is that LEG had not been able to generate sufficient Cash Flow from Operations to reduce this Debt in a significant way. From 2012 to 2021 it generated an average of USD 477 million in Cash Flow from Operations per year. During this period, it paid out an average of USD 195 million in annual dividends and spent USD 100 million annually on share buybacks. The average CAPEX was 111 million. This leaves a balance of USD 71 million per year for reducing the current USD 2.3 billion Debt.

Sep 21

Leggett & Platt: Is The Canary In The Coal Mine Smelling A Recession?

Summary LEG reported mixed results for the second quarter. The Bedding Products segment continues to show signs of a slowdown, but the automotive and aerospace segments remain strong - for now. Management had to revise its sales and profit forecasts but remains optimistic about the company's short- and long-term performance. Leggett & Platt's focus on domestic manufacturing puts it in a comfortable position while others scramble to establish redundancies in what is looking to become an increasingly deglobalized world. The company is well prepared for what is widely believed to be ahead and continues to put an emphasis on responsible cash returns to shareholders and a solid balance sheet. In this article, I will discuss Leggett & Platt's recent performance, potential implications for my investment thesis, and my expectations as a long-term oriented shareholder. Introduction I first covered Leggett & Platt (LEG), a manufacturer of bedding, furniture, flooring and textiles, as well as specialty products for the automotive and aerospace industries, in early February 2022, after noting that the stock had nearly completed its round-trip from exuberant 2021 highs. In mid-March, I published a follow-up article focused on the company's long-term performance since before the dot-com bubble. As an internationally diversified manufacturer of primarily discretionary products, the company has faced a number of headwinds since the outbreak of the pandemic in early 2020. Leggett & Platt reported its second-quarter results in late August and lowered its full-year revenue and earnings per share ((EPS)) forecasts (midpoint -2.8% and -6.4%, respectively). In the conference call, management shared several key insights that help understand the company's positioning in this challenging environment. In this article, I will discuss Leggett & Platt's recent performance, potential implications for my investment thesis, and my expectations as a long-term oriented shareholder. Supply Chain Headwinds, A Difficult Labor Market, And Deteriorating Consumer Sentiment Most companies still face supply chain headwinds due to extensive outsourcing, just-in-time manufacturing and other efficiency measures introduced in recent decades. However, Leggett & Platt still manufactures predominantly in the U.S. (Figure 1). As a result, supply chain issues have been and continue to be far less noticeable than might otherwise be expected. Price inflation for raw materials (resin and other oil derivatives) is more of a concern, as are increased transportation costs. However, the company's steel rod business serves as an important counterbalance to increased raw material costs and is understandably thriving in this environment at present. Much of Leggett's steel-based business is contractual, but margins - which have increased recently - are naturally beginning to normalize as the price of steel softens. At the same time, input costs in Leggett's Bedding Products segment are also beginning to normalize as the cost of energy appears to stabilize and the company has implemented several cost reduction programs. Last quarter's results were impacted by operational issues at one of Leggett's U.S. facilities, which appear to have been largely resolved in recent months. Overall, I would not overstate input cost inflation, although Leggett's relatively low gross margin (20% on average since 1999) suggests that the company is at a competitive disadvantage. Strong sales growth against the backdrop of a high single-digit rate of inflation suggests that the company does indeed have good pricing power. After all, Leggett & Platt is the leader in most markets and has to fend off only few large competitors (p. 3, August 2022 company update). Figure 1: Leggett & Platt's geographical production footprint (own work, based on p. 90 of the company's 2021 10-K) In addition to input cost inflation, the company's current performance is primarily impacted by secondary effects in the supply chain from Leggett's raw material suppliers and OEM customers who are unable to ramp up production to normal levels due to incomplete parts inventories or lack of labor availability. Of course, the difficult labor market is also a problem for Leggett & Platt, but CEO Dolloff noted in a response to an analyst's question that the company's spending on excess labor costs is declining (p. 8, Q2 2022 earnings call transcript). As a vertically integrated manufacturer of bedding products (48% of estimated 2022 net retail sales, p. 4, August 2022 company update), it is hardly surprising that management is confident in the stability of its supply chain and well-protected against future disruptions. This enables the company to increase its market share in difficult times, when competitors with an emphasis on out-sourced manufacturing scramble to establish redundancies in what is looking to become an increasingly deglobalized world. Striking a less optimistic tone, it is important to remember that Leggett's business is dependent on the housing market. Leggett's management has cited a weakening housing market as the primary reason for the somewhat uninspiring recent performance of its Furniture, Flooring & Textile Products and Bedding Products segments. Since I own both Leggett & Platt and The Home Depot (HD) - which I recently discussed - I can see my portfolio taking a double hit in this regard. However, in the spirit of full disclosure, I want to emphasize that I still only own a very small position in HD and consider my portfolio to be well diversified. Leggett & Platt's Specialized Products segment, with its focus on the automotive and aerospace industries, is understandably particularly affected by the secondary effects mentioned above, and the recovery from the pandemic is far from complete. The industry forecast for global automotive production has stabilized since April, and demand for fabricated duct assemblies has returned to pre-pandemic levels, but significant growth is lacking. Management has been very open in its communication and continues to expect a normalization to 2019 demand levels by 2024. Aircraft backlogs are near their peak, but management also saw year-over-year volume growth. The U.S. forklift end market - and therefore Leggett's hydraulic cylinder business - also remains strong, and the market is currently looking at a 22-month backlog. However, it should not be forgotten that several economic indicators continue to trend negatively, such as the Purchasing Managers index, Moody's business confidence indicator, and the Baltic Dry index, which of course must be viewed in a nuanced manner as it also signals deflation in commodity prices. For this reason, and given the consensus that the U.S. (or most likely the entire world) is headed for a recession, management's current forecasts are subject to some uncertainty, but the continued strength of the recovery of Leggett's industrial segments - as opposed to its consumer-facing business units - leaves a generally positive impression. For the full year, management expects volume growth in the Specialty Products segment to be in the low double-digit range. Consumers appear to be increasingly focusing their spending on services and other areas, to the detriment of durable goods manufacturers like Leggett & Platt. Tyson Hagale, president of the Bedding Products segment, noted that the company has seen signs of a slowdown since late last year, first in the low-price segment and later and to a lesser extent in the mid- and high-price segments (p. 10, Q2 2022 earnings call transcript). For the full year, management expects a low double-digit volume decline in the segment. Consumer price inflation has also put pressure on the low-price segment of the Home Furniture group, while the mid- and high-price segments remain strong, but this is mainly related to the high backlogs the company is currently working through. Leggett's CEO remains optimistic, however, and expects at least stabilization at a reasonable level when inflation eventually stabilizes and moderates. Finally, the currency-related headwind from the strong U.S. dollar is also reflected in the sales figures for the quarter and the half-year and, in addition to the lower sales volumes (as described above), is another reason for the guidance revision. Leggett & Platt's Shareholder Returns, Free Cash Flow Management, And Leverage On August 9, 2022, Leggett & Platt announced its 51st consecutive annual dividend increase - up 4.8% to $0.44 per share. This is a very respectable track record for a cyclical company. The company also engaged in share repurchases, retiring one million shares during the quarter (i.e., 0.75% of shares outstanding at the end of Q2 2022). Year-to-date, Leggett has retired 1.6 million shares for $57 million, an average price of $35.6 per share. Management acted opportunistically, as evidenced by the more aggressive buybacks in the second quarter, and for the most part refrained from buying back shares at high valuations in 2021 (Figure 2) - as was the case with several other companies, such as The Home Depot ($14.8 billion) and Lowe's (LOW, $13.0 billion). Figure 2: Leggett & Platt's share repurchases each quarter since Q1 2014, compared to LEG's share price (own work, based on the data found in the company's quarterly and annual cash flow statements, and the daily closing price of LEG) The decision to opportunistically buy back shares and the continued emphasis on a growing dividend are a strong sign of management's confidence in the company's future. Of course, wary investors might view the emphasis on shareholder returns as irresponsible in the context of a potentially severe downturn. However, management was also very confident when confronted with the question of how Leggett would proceed in a sharply deteriorating economy (p. 10 f., Q2 2022 earnings call transcript). Moreover, the company has exited the pandemic in remarkably good shape. In my first article, I pointed out that Leggett's strong resilience and excellent management were the main pillars of my investment thesis. In the Q2 2022 Q&A session, management pointed out that the unique situation in early 2020 has resulted in improved capabilities that will help the company more easily navigate difficult situations in the future. Leggett & Platt's management is well versed in improving the business internally, as the cyclical nature of the business does not typically lead to significant long-term sales growth. Cash flow growth has therefore had to come from supply chain and manufacturing optimizations, as well as improved working capital efficiency (p. 13, August 2022 company update) and cost reductions. Leggett was able to achieve $90 million in permanent cost savings in 2020, for example, which put the company in an increasingly comfortable position. However, if the company does face a severe recession, the CEO still sees room for more radical cost cutting. In addition to the levers already mentioned, the vertical integration of the beddings products business should also be seen as an important step towards strengthening Leggett's operations in the long term. The acquisition of Elite Comfort Solutions (ECS) in 2019 was certainly a bold move ($1.25 billion), but marked a final major step in that direction, and the more recent acquisition of Kayfoam in the second quarter of 2021 helped expand Leggett's footprint. In the context of working capital accounts, Leggett's management definitely stands by its words. Working capital has normalized significantly following atypical destocking and restocking in 2020 and 2021, respectively. Since the fourth quarter of 2021, the company has adjusted its inventory levels in line with the aforementioned slowdown in bedding sales. Management believes the company is very well positioned to respond quickly to future changes in consumer demand, whether up or down, and currently expects operating cash flow of $550 million to $600 million and capital expenditures of $130 million for the full year. Thus, free cash flow is in line with the expectations I discussed in my second article on the company, resulting in a very acceptable interest coverage ratio (based on pre-interest free cash flow, which as a proxy excludes a beneficial tax shield effect). For 2022, management expects net interest expense of $80 million and dividend payments of $230 million, which also puts the company in a comfortable position from a payout ratio perspective. Finally, in terms of debt, management has acted in a very disciplined manner in the past, also in order not to violate the covenants related to its credit facility. The bold acquisition of ECS in 2019 was well digested, and the company focused on deleveraging and largely refrained from buying back shares until recently. This is exactly the behavior a long-term investor focused on capital preservation would like to see. The leverage covenant associated with the company's revolving credit facility ($1.2 billion, maturing in September 2026, currently undrawn, p. 39, 2022 10-Q2) was changed from gross debt to net debt in May 2020 and again in September 2021 from a metric perspective to 3.5 times net debt to EBITDA from 2.5 times previously (p. 94, 2021 10-K), leaving more room for short-term liquidity needs. However, the changes should not be seen as a sign of desperation and a tight liquidity situation, given Leggett's current and historical leverage levels (Figure 3) and the investment grade credit rating. Figure 3: Leggett & Platt's historical net debt to EBITDA, adjusted for goodwill impairment charges (own work, based on the company's 2007 to 2021 10-Ks, the second quarter 2022 8-K and most recent full-year guidance)

Sep 20
Is It Time To Consider Buying Leggett & Platt, Incorporated (NYSE:LEG)?

Is It Time To Consider Buying Leggett & Platt, Incorporated (NYSE:LEG)?

While Leggett & Platt, Incorporated ( NYSE:LEG ) might not be the most widely known stock at the moment, it saw a...

Shareholder Returns

LEGUS Consumer DurablesUS Market
7D-2.5%-3.1%-2.5%
1Y-27.0%-33.6%-23.2%

Return vs Industry: LEG exceeded the US Consumer Durables industry which returned -32.6% over the past year.

Return vs Market: LEG underperformed the US Market which returned -21.5% over the past year.

Price Volatility

Is LEG's price volatile compared to industry and market?
LEG volatility
LEG Average Weekly Movement4.1%
Consumer Durables Industry Average Movement6.2%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: LEG is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: LEG's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
188320,300Mitch Dolloffhttps://www.leggett.com

Leggett & Platt, Incorporated designs, manufactures, and markets engineered components and products worldwide. It operates through three segments: Bedding Products; Specialized Products; and Furniture, Flooring & Textile Products. The company offers steel rods, drawn wires, foam chemicals and additives, innersprings, specialty foams, private label finished mattresses, mattress foundations, wire forms for mattress foundations, adjustable beds, industrial sewing and quilting machines, and mattress packaging and glue drying equipment, as well as machines to produce innersprings for industrial users of steel rods and wires, manufacturers of finished bedding, big box and e-commerce retailers, bedding brands and mattress retailers, department stores, and home improvement centers.

Leggett & Platt Fundamentals Summary

How do Leggett & Platt's earnings and revenue compare to its market cap?
LEG fundamental statistics
Market CapUS$4.41b
Earnings (TTM)US$388.30m
Revenue (TTM)US$5.31b

11.3x

P/E Ratio

0.8x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LEG income statement (TTM)
RevenueUS$5.31b
Cost of RevenueUS$4.25b
Gross ProfitUS$1.06b
Other ExpensesUS$668.90m
EarningsUS$388.30m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 31, 2022

Earnings per share (EPS)2.93
Gross Margin19.91%
Net Profit Margin7.31%
Debt/Equity Ratio129.5%

How did LEG perform over the long term?

See historical performance and comparison

Dividends

5.3%

Current Dividend Yield

60%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is LEG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LEG?

Other financial metrics that can be useful for relative valuation.

LEG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.2x
Enterprise Value/EBITDA8.5x
PEG Ratio2.7x

Price to Earnings Ratio vs Peers

How does LEG's PE Ratio compare to its peers?

LEG PE Ratio vs Peers
The above table shows the PE ratio for LEG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average6.1x
MHK Mohawk Industries
5.9x7.5%US$5.8b
TPX Tempur Sealy International
7.2x5.1%US$4.2b
LZB La-Z-Boy
5.9x0.2%US$971.3m
ETD Ethan Allen Interiors
5.2x-20.8%US$535.8m
LEG Leggett & Platt
11.3x4.2%US$4.4b

Price-To-Earnings vs Peers: LEG is expensive based on its Price-To-Earnings Ratio (11.3x) compared to the peer average (6.1x).


Price to Earnings Ratio vs Industry

How does LEG's PE Ratio compare vs other companies in the US Consumer Durables Industry?

Price-To-Earnings vs Industry: LEG is expensive based on its Price-To-Earnings Ratio (11.3x) compared to the US Consumer Durables industry average (6.2x)


Price to Earnings Ratio vs Fair Ratio

What is LEG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LEG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio11.3x
Fair PE Ratio11.4x

Price-To-Earnings vs Fair Ratio: LEG is good value based on its Price-To-Earnings Ratio (11.3x) compared to the estimated Fair Price-To-Earnings Ratio (11.4x).


Share Price vs Fair Value

What is the Fair Price of LEG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LEG ($33.22) is trading below our estimate of fair value ($64.33)

Significantly Below Fair Value: LEG is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Leggett & Platt forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


4.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LEG's forecast earnings growth (4.2% per year) is above the savings rate (1.9%).

Earnings vs Market: LEG's earnings (4.2% per year) are forecast to grow slower than the US market (14.7% per year).

High Growth Earnings: LEG's earnings are forecast to grow, but not significantly.

Revenue vs Market: LEG's revenue (2.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: LEG's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if LEG's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Leggett & Platt performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


4.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LEG has high quality earnings.

Growing Profit Margin: LEG's current net profit margins (7.3%) are lower than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: LEG's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: LEG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LEG had negative earnings growth (-6.4%) over the past year, making it difficult to compare to the Consumer Durables industry average (29%).


Return on Equity

High ROE: Whilst LEG's Return on Equity (24.06%) is high, this metric is skewed due to their high level of debt.


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Financial Health

How is Leggett & Platt's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: LEG's short term assets ($2.1B) exceed its short term liabilities ($1.3B).

Long Term Liabilities: LEG's short term assets ($2.1B) do not cover its long term liabilities ($2.3B).


Debt to Equity History and Analysis

Debt Level: LEG's net debt to equity ratio (112.8%) is considered high.

Reducing Debt: LEG's debt to equity ratio has increased from 104.7% to 129.5% over the past 5 years.

Debt Coverage: LEG's debt is not well covered by operating cash flow (17.7%).

Interest Coverage: LEG's interest payments on its debt are well covered by EBIT (7.6x coverage).


Balance Sheet


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Dividend

What is Leggett & Platt current dividend yield, its reliability and sustainability?

Dividend Score

6/6

Dividend Score 6/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


5.30%

Current Dividend Yield

Dividend Yield vs Market

Leggett & Platt Dividend Yield vs Market
How does Leggett & Platt dividend yield compare to the market?
SegmentDividend Yield
Company (Leggett & Platt)5.3%
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Consumer Durables)2.9%
Analyst forecast in 3 Years (Leggett & Platt)5.6%

Notable Dividend: LEG's dividend (5.3%) is higher than the bottom 25% of dividend payers in the US market (1.66%).

High Dividend: LEG's dividend (5.3%) is in the top 25% of dividend payers in the US market (4.7%)


Stability and Growth of Payments

Stable Dividend: LEG's dividends per share have been stable in the past 10 years.

Growing Dividend: LEG's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (59.7%), LEG's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (86%), LEG's dividend payments are covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Mitch Dolloff (56 yo)

2.67yrs

Tenure

US$4,218,162

Compensation

Mr. J. Mitchell Dolloff, also known as Mitch, serves as Chief Executive Officer at Leggett & Platt, Incorporated since January 01, 2022 and is its President and Director since January 1, 2020. He had been...


CEO Compensation Analysis

Mitch Dolloff's Compensation vs Leggett & Platt Earnings
How has Mitch Dolloff's remuneration changed compared to Leggett & Platt's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$388m

Mar 31 2022n/an/a

US$405m

Dec 31 2021US$4mUS$781k

US$402m

Sep 30 2021n/an/a

US$405m

Jun 30 2021n/an/a

US$415m

Mar 31 2021n/an/a

US$296m

Dec 31 2020US$4mUS$646k

US$253m

Sep 30 2020n/an/a

US$232m

Jun 30 2020n/an/a

US$224m

Mar 31 2020n/an/a

US$317m

Dec 31 2019US$4mUS$597k

US$314m

Sep 30 2019n/an/a

US$300m

Jun 30 2019n/an/a

US$290m

Mar 31 2019n/an/a

US$289m

Dec 31 2018US$3mUS$512k

US$306m

Sep 30 2018n/an/a

US$289m

Jun 30 2018n/an/a

US$283m

Mar 31 2018n/an/a

US$285m

Dec 31 2017US$2mUS$480k

US$294m

Sep 30 2017n/an/a

US$340m

Jun 30 2017n/an/a

US$350m

Mar 31 2017n/an/a

US$363m

Dec 31 2016US$1mUS$345k

US$367m

Compensation vs Market: Mitch's total compensation ($USD4.22M) is below average for companies of similar size in the US market ($USD6.85M).

Compensation vs Earnings: Mitch's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: LEG's management team is considered experienced (2.8 years average tenure).


Board Members

Experienced Board: LEG's board of directors are considered experienced (6.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: LEG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

NYSE:LEG Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
05 Aug 22SellUS$1,070,033Karl GlassmanIndividual26,401US$40.53
01 Jun 22SellUS$95,870Phoebe WoodIndividual2,500US$38.35
17 Feb 22SellUS$583,395Robert BrunnerIndividual15,000US$38.89

Ownership Breakdown

What is the ownership structure of LEG?
Owner TypeNumber of SharesOwnership Percentage
State or Government56,2840.04%
Individual Insiders1,805,2051.4%
General Public32,034,47424.2%
Institutions98,722,72774.4%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 56.15% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
13.71%
State Street Global Advisors, Inc.
18,185,179$604.1m25.36%0.03%
11.17%
BlackRock, Inc.
14,816,912$492.2m1.66%0.01%
9.71%
The Vanguard Group, Inc.
12,882,337$428.0m10.06%0.01%
3.85%
Charles Schwab Investment Management, Inc.
5,101,671$169.5m4.56%0.05%
1.83%
BNY Mellon Asset Management
2,432,313$80.8m-1.2%0.02%
1.32%
Dimensional Fund Advisors LP
1,751,861$58.2m3.59%0.01%
1.31%
U.S. Bancorp Asset Management, Inc.
1,736,348$57.7m-10.02%0.13%
1.3%
Geode Capital Management, LLC
1,728,327$57.4m-0.68%0.01%
1.02%
Old Republic International Corp., Asset Management Arm
1,356,500$45.1m0%1.15%
1%
Norges Bank Investment Management
1,330,114$44.2m0%0.01%
0.85%
Morgan Stanley, Investment Banking and Brokerage Investments
1,122,740$37.3m43.73%0.01%
0.84%
Invesco Capital Management LLC
1,108,046$36.8m11.73%0.03%
0.79%
Northern Trust Global Investments
1,048,307$34.8m0.83%0.01%
0.73%
ID-Sparinvest, Filial af Sparinvest S.A., Luxembourg
968,878$32.2m0%0.47%
0.73%
Silvercrest Asset Management Group LLC
962,389$32.0m-7.66%0.26%
0.71%
Eaton Vance Management
940,974$31.3m-1.16%0.01%
0.7%
FMR LLC
924,287$30.7m-62.47%no data
0.66%
Toronto-Dominion Bank, Banking Investments
881,091$29.3m-5.28%0.06%
0.66%
Karl Glassman
879,063$29.2m-2.09%no data
0.64%
Berkshire Asset Management, LLC
848,515$28.2m2.91%1.95%
0.61%
Speece Thorson Capital Group Inc
804,418$26.7m19.04%6.47%
0.52%
Crawford Investment Counsel, Inc.
695,297$23.1m47%0.55%
0.51%
Epoch Investment Partners, Inc.
679,103$22.6m-2.28%0.39%
0.5%
ProShare Advisors LLC
659,822$21.9m14.08%0.07%
0.47%
Wells Fargo & Company, Securities and Brokerage Investments
617,151$20.5m-2.22%0.01%

Company Information

Leggett & Platt, Incorporated's employee growth, exchange listings and data sources


Key Information

  • Name: Leggett & Platt, Incorporated
  • Ticker: LEG
  • Exchange: NYSE
  • Founded: 1883
  • Industry: Home Furnishings
  • Sector: Consumer Durables
  • Implied Market Cap: US$4.406b
  • Shares outstanding: 132.62m
  • Website: https://www.leggett.com

Number of Employees


Location

  • Leggett & Platt, Incorporated
  • No. 1 Leggett Road
  • Carthage
  • Missouri
  • 64836
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LEGNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1970
LP1DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1970
0JTTLSE (London Stock Exchange)YesCommon StockGBUSDJan 1970
L1EG34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 COMBRBRLJan 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/30 00:00
End of Day Share Price2022/09/30 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.